Due diligence is the systematic investigation of a company, transaction, or legal matter to identify material risks, liabilities, and issues before a deal closes, an investment is made, or a legal decision is taken.
Last reviewed: 2026/05/19
Contract review is the legal process of analyzing a contract's terms, conditions, and obligations to identify risks, ensure compliance with applicable law, assess alignment with the client's interests, and negotiate or recommend changes before execution.
CapabilityContract Review AI is software that uses natural language processing to automatically identify, extract, and flag clauses, risks, and deviations from standard terms in legal contracts.
Legal PracticeAI-assisted discovery uses artificial intelligence to manage collection, processing, review, and production of electronically stored information in litigation — dramatically reducing per-document review costs through technology-assisted review, predictive coding, and generative AI overlays.
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Last reviewed: 2026/05/19. Definitions are written by the LawyerAI Editorial team. Commercial relationships are disclosed and do not determine editorial scores or conclusions. See our Sponsorship & Affiliate Disclosure.
Due diligence is the systematic investigation of a company, transaction, or legal matter to identify material risks, liabilities, and issues before a deal closes, an investment is made, or a legal decision is taken.
Legal due diligence is central to M&A transactions, private equity investments, real estate acquisitions, and regulatory proceedings. In an M&A context, legal due diligence requires reviewing thousands of contracts, corporate records, litigation files, IP registrations, employment agreements, and regulatory filings to identify undisclosed liabilities, consent requirements, change-of-control triggers, and other matters that could affect deal value or structure.
The volume involved in large deals makes manual due diligence both slow and inconsistent. A mid-market acquisition might involve a data room with 3,000 documents; a large-cap transaction may have 50,000 or more. Human review at that scale requires large teams, extended timelines, and still produces coverage gaps.
AI-assisted due diligence has become standard practice for volume-intensive reviews. The lawyer's role in AI-assisted due diligence is not eliminated but restructured: configuring the review to capture relevant provisions, reviewing AI-flagged issues, investigating anomalies, and applying judgment about materiality. The lawyer owns the diligence conclusions; the AI compresses the document screening phase.
Professional obligations require that due diligence results be complete enough to support informed client advice. If AI-assisted review misses material issues, the lawyer may face malpractice exposure — so quality control processes are essential.
AI due diligence tools are purpose-built for document-intensive transactional review. Kira Systems and Luminance support due diligence workflows by extracting defined provisions from data room documents and presenting them in organized reports for attorney review. Diligen specializes in contract data extraction with strong configurability for specific provision types relevant to due diligence.
These tools typically generate summary matrices showing how a defined provision appears across all reviewed contracts — for example, every change-of-control provision across 500 vendor agreements displayed in a single table. This allows the lawyer to quickly identify which contracts require consent for the deal to close and assess the scope of the consent solicitation exercise.
Harvey AI and similar tools support free-form analysis questions about diligence documents, allowing lawyers to ask questions like "which of these contracts has a survival clause exceeding three years?" across the document set rather than reviewing each document individually.
For a direct comparison of two major due diligence AI platforms, see Kira Systems vs. Luminance.